Ballmer: Success requires a balancing act

Microsoft CEO Steve Ballmer was criticized for failing in markets where the company had been a pathfinder and being unattractive to recent graduates, during a conversation with students at the University of Washington.

Microsoft was an early technology developer in some market segments like tablet computers, interactive TV and digital music players, yet other companies have been more successful in those segments, noted Ed Lazowska, chair of computer science and engineering at the University of Washington, who moderated the conversation.

Ballmer defended the company's track record. "There are plenty of areas where we've been first and have had clear success," he said.

But he also admitted that some other experiences offer lessons. "Probably the lesson or reminder is in a sense success in a commercial sense or in an adoption sense requires doing a lot of things right," Ballmer said. The innovation, delivery model, hardware, software, services, branding and timing all must be right in order to be successful, he said.

"There are cases where that went brilliantly and cases that we're working on," he said.

Microsoft, and other companies, face similar balancing acts when trying to decide whether to invest in new products or invest in products that will compete with others already in the market.

"Everything's a set of judgments," Ballmer said. It's a matter of trying to predict how the market will react while timing development correctly, he said. Doing so requires agility so that a company can assign resources appropriately. "I wouldn't say we have 100 percent fluidity to switch things around on a dime. We have to decide when to build new expertise and what expertise to build," he said. "There's not a science to it. There's no formula that says spend x percent on y."

Perhaps it was the sense that Microsoft is getting that wrong often enough that prompted one student to ask Ballmer to comment on perceived recruiting problems that the company has compared to other companies that are thought to be developing more cutting-edge technologies.

Ballmer denied having recruiting challenges, saying he thinks the company does a good job attracting the best and brightest people. When Microsoft is competing with another company for a worker, it wins 50 percent of the time that the recruit gets dual offers, he said.

Based on the quality of work, excitement level and the chance to do interesting work, "we're right up there with anyone on the planet," he said.

While Microsoft may not have the perceived excitement as some other popular technology companies, it still draws the most computer science graduates of any company from the University of Washington, Lazowska said. Every year around 30 people with bachelor's degrees in computer science from the university take jobs at Microsoft, he said.

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